The Supreme Court of India, in a significant ruling, has held that the right of a person to claim compensation for injuries sustained in a motor accident survives to their legal representatives upon their death, irrespective of the cause of death. A bench comprising Justice K. Vinod Chandran and Justice N. V. Anjaria set aside a preliminary objection from an insurance company and enhanced the compensation for a claimant who was rendered 100% disabled in an accident and subsequently died during the pendency of his appeal.
The Court allowed the appeal filed by the legal heirs of the deceased claimant, Dhannalal, enhancing the total compensation to ₹20,37,095 with 9% interest from the date of the claim petition until payment.
Background of the Case
The case originated from a motor accident that left the claimant, Dhannalal, with 100% disability. He had filed an appeal in the Supreme Court seeking enhancement of the compensation awarded by the Motor Accidents Claims Tribunal and the High Court. Unfortunately, the claimant passed away on April 24, 2024, while the appeal was still pending. His legal representatives were then substituted to continue the proceedings.
Arguments of the Parties
The respondent insurance company raised a preliminary objection to the continuation of the appeal by the legal representatives. The insurer’s counsel argued that a claim for personal injury is extinguished upon the death of the claimant, as per Section 306 of the Indian Succession Act, 1925. The company cited a Full Bench decision of the Madhya Pradesh High Court in Bhagwati Bai and Anr. v. Bablu and Mukund and Ors. in its support.
The appellants, the legal heirs of the deceased, sought an enhancement of the compensation. They contended that the Tribunal had arbitrarily reduced the monthly income of the deceased from ₹8,000, which was initially determined, to ₹4,000 upon remand, without providing any reasonable cause.
Court’s Analysis and Findings
The Supreme Court first addressed the preliminary objection regarding the survivability of the claim. Justice K. Vinod Chandran, writing the judgment, found a “simple and clear” resolution in the Motor Vehicles (Amendment) Act, 2019, which introduced sub-section (5) to Section 167 of the Motor Vehicles Act, 1988, effective from April 1, 2022.
The Court quoted the provision, which states:
(5) Notwithstanding anything in this Act or any other law for the time being in force, the right of a person to claim compensation for injury in an accident shall, upon the death of a person injured, survive to his legal representatives, irrespective of whether the cause of death is relatable to or had any nexus with the injury or not.
The judgment noted that since the claimant died in 2024, after the amendment came into force, the provision was “squarely applicable.” The Court also referenced its previous decisions in Oriental Insurance Company Limited v. Kahlon @ Jasmail Singh Kahlon and Meena (Dead) Rep. by LRs. v. Prayagraj and Others, reaffirming the principle that legal heirs can pursue claims for loss to the estate of an injured person who dies subsequently.
On the quantum of compensation, the Court found merit in the appellants’ argument. It noted that while no documentary evidence was submitted, oral evidence suggested the claimant was a skilled worker (‘Mistry’). Referencing its decision in Ramachandrappa v. Manager, Royal Sundaram Alliance Insurance Company Limited, the Court determined that ₹9,000 could be safely accepted as the claimant’s monthly income at the time of the accident in 2013.
A crucial aspect of the analysis was the application of the multiplier. The Tribunal and High Court had used a multiplier of 14. However, the Supreme Court observed that the claimant had lived for only 11 years after the accident. The judgment stated, “When the consideration in the present appeal, is with respect to the loss occasioned to the estate of the injured; the injured having died, the multiplier adopted of 14 cannot be applied which will have to be reduced to 11, the actual life span.”
The Court also held that the claimant was entitled to a 25% enhancement for future prospects, given his 100% functional disability. The award of ₹5,52,095 under conventional heads like mental agony, pain, and medical expenses was sustained as it had “already become a part of the estate of the injured-victim.”
The loss of income was recalculated as: ₹9,000 x 12 x 125% x 11 = ₹14,85,000. This brought the total compensation to ₹20,37,095.
Final Decision
The Supreme Court allowed the appeal, enhancing the total compensation to ₹20,37,095. It directed that interest at the rate of 9% per annum would be applicable from the date of filing the claim petition until the date of payment, setting aside the High Court’s restriction on the interest period. The Court ordered the respondent insurance company to pay the balance amount within three months after deducting any sums already paid.
